Sweden sued for property tax rule

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The European Commission is suing Sweden in the European Court because of Sweden's law permitting home owners to postpone capital gains tax on the sale of homes.

The Commission objects to Swedish rule that permits people who sell a house of apartment to postpone paying tax on the profit as long as the profit is used to buy a new property in Sweden.

The tax can not be postponed if the new house or apartment is in another EU country.

This, according to the Commission, hinders free movement of labour, and disadvantages those who want to buy a new property outside Sweden.

The Swedish government has done everything it can to retain the current system. Two weeks ago finance minister Pär Nuder told the Riksdag that he did not have plans to abolish the right to postpone the tax.

The government now has less than two months to respond to the lawsuit, reports Swedish Radio.